Citigroup Q2 profit declines but beats estimates

Citigroup reported a drop in second-quarter net income as revenues fell, but the numbers were still better than expected.

Net income fell to $4bn, or $1.24 from $4.8bn and $1.51 as revenue declined to $17.5bn from $19.5bn. Analysts had been expecting the bank to post earnings per share of $1.10, while revenue was in line.

The decline in net income was driven by lower revenues and a higher effective tax rate, partially offset by lower cost of credit and lower operating expenses.

Chief executive officer Michael Corbat said: “These results demonstrate our ability to generate solid earnings in a challenging and volatile environment, again highlighting the resilience of our institution.

“Nearly all of our net income came from our core businesses and we continued to reduce non-core assets in Citi Holdings. We significantly improved our efficiency ratio, return on assets and return on tangible common equity from the first quarter. We also grew loans in both our consumer and institutional businesses, reduced expenses, and utilized additional deferred tax assets, bringing the total utilized to $10 billion over the last four years.”

Citigroup said it repurchased 30m common shares and returned $1.5bn of capital to shareholders.

Shares were up 0.8% to $44.45 in pre-market trade.